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Department of Economics, Aarhus School of Business, University of Aarhus Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus

No 10-14:
The Role of Family Background for Earnings in Rural China

Tor Eriksson () and Yingqiang Zhang

Abstract: This paper provides estimates of brother income correlations for rural China. Brother correlations are a parsimonious measure of the importance of family and community background as determinants of individuals’ economic status. We find internationally high levels of income similarity for brothers and siblings: 0.57 and 0.58, respectively. We show that compared with the 1990s, income correlations have decreased in more recent years, but remain high. Furthermore, we document virtually no differences between the coastal and interior provinces and by father’s education. The high brother correlations imply that the high level of income inequality in China is likely to persist.

Keywords: Family background; sibling correlation; income inequality; (follow links to similar papers)

JEL-Codes: D31; J62; (follow links to similar papers)

18 pages, January 1, 2010

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